Mumbai: Indian gold futures were higher on the Multi Commodity Exchange of India Ltd (MCX) in step with foreign markets that found support from higher crude oil and a weaker dollar, and analysts said: “It could show some more strength.”
The precious metal for deliveryin October was up Rs38 to Rs11,868 per 10 grams in late morning deals on the Multi Commodity Exchange of India Ltd (MCX). December gold gained Rs35 to Rs11,970 per 10 grams.
“Gold could move sideways to up. The big threat is coming from crude oil,” said an analyst at Motilal Oswal Commodities Broker Pvt Ltd.
Overseas gold, that guides the local market was buoyed by crude oil as a tropical storm threatened oil production bases in the Gulf of Mexico.
A dollar retreating against other international currencies, on fears Russia may cut oil supplies to western Europe amid tensions surrounding its action in Georgia, also helped gold.
Gold generally moves in tandem with crude oil as the latter signals inflation, while the metal negates it. But the metal has an inverse relation with the dollar, as the two compete for funds.
“The benchmark October gold on MCX was expected to trade within Rs11,700 and Rs12,000 per 10 grams,” said the analyst at Motilal Oswal.
Open interest for October gold was at 9,775 lots, up from 9,740 yesterday. Volume on the previous day was at 58.23 kg.